SHOULD THE UNITED STATES WORRY ABOUT
LARGE, FAST-GROWING ECONOMIES?
This report represents an initial investigation into the relationship between economic growth and military expenditures for candidate great powers. On the basis of three hypotheses about that relationship—“ambition,” “fear,” and “legitimacy”—we have undertaken two types of empirical tests: a statistical analysis of the ambition and fear hypotheses, and historical case studies of all three hypotheses. While our statistical analysis is ambiguous with respect to the ambition and fear hypotheses, the case studies provide some evidence in support of both.
Overall, the evidence offered by this report suggests that large and fast-growing economies are likely to devote an increasing, but not disproportionately increasing, share of their growing national resources to their militaries. Since circa 1870, four of the five great powers we examined increased their military expenditures as they experienced dramatic transformations in economic growth, with significant consequences for international politics. However, the direction of causality between military expenditures and economic growth has not been established, and perhaps more important, the motivations behind military expenditure growth probably include complex combinations of ambition, fear, and to a lesser extent, legitimacy.
The critical question at this juncture, therefore, is whether the United States ought to be concerned about the prospect of increased military expenditures on the part of large and rapidly growing economies? As a first cut, the answer to this question must undoubt